Friday, June 3, 2011

Those of you who have expressed confident knowledge of the precise target of Luc Ferry's rumor-mongering may be interested in an item that appeared in Le Mondeon April 28, 2006, a week after a similar story was published in Le Canard enchaîné. It concerns neither of the two foreign ministers whose names have been bandied about, but a third, M. Douste-Blazy:

The timing of this story, the wrath of Jacques Chirac, and its open discussion by other ministers at the time make it seem likely that this is the story Luc Ferry had in mind, and that he was a little confused about certain crucial details (la pédophilie, un détail, as M. Le Pen might say). So here we have an object lesson in the dangers of rumor-mongering. Facts have a way of getting distorted. And there was no cover-up, as you can see. Your intrepid newspaper of record was on the case.

A minor footnote to the tale: Dominique Cantien was Nicolas Hulot's companion before marrying Douste-Blazy, from whom she has since divorced.

Jean-Claude Trichet wants a more federal Europe to save the euro. In fact, what he's proposing has been a persistent aim of French governments: greater council control of the European Central Bank and a dual mandate for the bank, something closer to the mandate of the U.S. Federal Reserve. This has always made eminent good sense but has nevertheless been opposed by Germany, historically skittish about "debauching the currency." We'll see how this latest proposal fares in a time of crisis, when half-measures seem not to be working.

Is this possible? I'm not an energy expert, but this seems like an awfully large bet to place on wind (plus improvements in the transmission network, measures to economize on consumption, etc.). And wind power, even at its current fairly modest level, has aroused opposition.

He doesn't seem to realize that his critique of the Federal Reserve "and its printing press" puts him on the side of economic cranks such as Ron Paul and that his critique of the federal debt puts him in bed with the Republicans who, suicidally, refuse to raise the debt limit. The faltering recovery in the U.S. requires more, not less, stimulus (= deficit spending) and therefore a larger federal debt. Mélenchon's right-wing Republican reading of the U.S. economic situation is a rather odd position for the candidate of the left of the French left to take. Sigh.

I don't always agree with Jean-Luc Mélenchon, but he perfectly captures the uneasiness I tried to express in my post "Charade?" (his historical example is the gutter press of the '30s; mine was Vichy, but the point is the same):

The answer [to the question of why sovereign debt default in peripheral countries is such a threat to European finances] is simple: the financial system’s entire regulatory framework was built on the assumption that government debt is risk-free. Any sovereign default in Europe would shatter this cornerstone of financial regulation, and thus would have profound consequences.
This is particularly visible in the banking sector. Internationally agreed rules stipulate that banks must create capital reserves commensurate to the risks that they take when they invest depositors’ savings. But when banks lend to their own government, or hold its bonds, they are not required to create any additional reserves, because it is assumed that government debt is risk-free. After all, a government can always pay in its own currency.
This assumption makes sense, however, only when a government issues debt in its own currency; only then can it order its central bank to print enough money to pay its creditors. Before the introduction of the euro, this was the case in all advanced countries.
...

It is easy to understand why the authorities persist in favoring public debt: the rules are set by finance ministers, who are naturally inclined to give themselves a good deal. Moreover, it is difficult for politicians to see that their budgets compete for a limited pool of savings. Lower financing costs for public debt appear to be a net gain to society, because the government then saves on debt service and can keep taxes lower. But any gains from lower taxes are more than offset by the losses to the private sector, which, facing higher financing costs, will invest less, in turn lowering economic growth – and thus reducing government revenues.
Many steps have been taken in recent years to reinforce regulation of the banking system. But what is proposed now will make lending for investment even less attractive and increase the incentive to concentrate sovereign risk in the banking sector. This can only worsen Europe’s sovereign-debt problem and weaken its already meager growth prospects.

One of the leading candidates to be the IMF’s next managing director has turned out to be a Frenchwoman, Christine Lagarde, who, as France’s finance minister, helped lead her country through the Great Recession. She has been an outspoken advocate of financial-sector reforms, and has won the respect of all of those with whom she has worked.
Politics is not always kind to good candidates. The world should be thankful that there is at least one. Where she was born should not be an impediment to her prospects.

Forget Sloterdijk and BHL. There is always Henri Bergson--once THE French philosopher, an inspiration to Proust, but now largely forgotten. A new edited collection of essays (Michael Kelly, ed.) tries to excavate what remains of Bergson in contemporary philosophical thought:

A special kind of unhappiness marks Henri Bergson's relationship to phenomenology: that of being dismissed by a tradition that has largely absorbed him. This is, at least, how Merleau-Ponty put it in late in his career:

If we had been careful readers of Bergson, and if more thought had been given to him, we would have been drawn to a much more concrete philosophy. . . . It is quite certain that Bergson, had we read him carefully, would have taught us things that ten or fifteen years later we believed to be discoveries made by the philosophy of existence itself. (h/t PG)

I cited Olivier Blanchard, current chief economist of the IMF, in the previous post. In this one I turn to Ken Rogoff, a former occupant of the same post, for a comment on the control of the IMF:

True, against all odds and historical logic, Europe seems poised to maintain the leadership of the IMF. Remarkably, in their resignation to the apparently inevitable choice for the top position, emerging-market leaders do not seem to realize that they should still challenge the United States’ prerogative of appointing the Fund’s extremely powerful number-two official. The IMF has already been extraordinarily generous to the PIGs. Once the new bailout-friendly team is ensconced, we can only expect more generosity, regardless of whether these countries adhere to their programs.
Unfortunately, an ultra-soft IMF is the last thing Europe needs right now. With its constitutional crisis, we have reached exactly the moment when the IMF needs to help the eurozone make the tough decisions that it cannot make on its own. The Fund needs to create programs for Portugal, Ireland, and Greece that restore competitiveness and trim debt, and that offer them realistic hope of a return to economic growth. The IMF needs to prevent Europeans from allowing their constitutional paralysis to turn the eurozone’s debt snowball into a global avalanche.
Absent the IMF, the one institution that might be able to take action is the fiercely independent European Central Bank. But if the ECB takes over entirely the role of “lender of last resort,” it will ultimately become insolvent itself. This is no way to secure the future of the single currency.

Please note the word démentir. Several of you commenters seem to be persuaded in advance that the rumor is nevertheless true. One of you claims that anyone "who had dealings at the rue de Valois knew." Really? How? Was there visible evidence of orgies when you walked into the lobby? Or do you mean, rather, that you knew someone who knew someone who worked at the rue de Valois who gave credence to gossip that might or might not have some basis in fact? Another commenter asserts that the criticism of Luc Ferry shows that the political class is yet again closing ranks. Perhaps. But mightn't it also indicate dismay that a responsible person would choose such an incendiary way to make a grave charge he had never seen fit to make in a more suitable forum than a TV studio?

I'm very much in favor of a higher standard of public morality (see my previous post), but I'm frankly shocked by the eagerness of some of you to leap from délation to condamnation sans appel. Please read a history of the Vichy regime to see the consequences of such credulity.

La Gauche, est-elle morale? is the title of a book by Christophe Prochasson. I am reminded of it this morning by an article in Mediapart. I recall with some embarrassment that I once expressed skepticism about the book's thesis by suggesting that the "technocratic" concern with economic realism was itself a kind of morality, for which I took Dominique Strauss-Kahn as an example. This argument today makes me look rather foolish and Prochasson, by contrast, quite prescient. Here is Michel Noblecourt reviewing Prochasson:

Newsletter Subscription

Site Statistics

Followers

About This Site

I have been a student and observer of French politics since 1968. In that time I've translated more than 130 books from the French, including Tocqueville's Democracy in America and Thomas Piketty's Capital in the 21st Century. I chair the seminar for visiting scholars at Harvard's Center for European Studies and am a member of the editorial board of French Politics, Culture, and Society and of The Tocqueville Review/La revue Tocqueville. You can read some of my writing on French politics and history here and a short bio here. From time to time I will include posts by other students of France and French politics (accessible via the index link "guest"). My hope is that this site will become a gathering place for all who are interested in discussing and analyzing political life in France. You can keep track of posts on Twitter by following "artgoldhammer".